Why are newer models cheaper than older ones?

[jpthomas27]

I'm almost ready to purchase a new plasma and am pretty sure I'm going with a Pioneer. What I can't figure out is why the 2008/09 models are cheaper than the 2006/07 models. Shouldn't the older models be cheaper?

Here are the comparisons as far as MSRP is listed. The actual retail prices I've seen seem to follow the same pattern.

Pioneer Kuro
(old) PDP-6010FD = $6,500
(new) PDP-6020FD = $5,500

Pioneer Elite Kuro
(old) Pro-150FD = $7,500
(new) Pro-151FD = $6,500

I've read everything I can find on all 4 TVs and I really don't see much of a difference in any of the technical aspects. I haven't read anything that really indicates the Elite Kuro series has any better picture than the Kuro series either.

Are the older models really better?
Are the Elite Kuro models worth the extra money over the Kuro models?

Any help clearing up the confusion would be most appreciated! Thanks.

[Kryptron]

It's simple dude. Prices go down. When there is more demand for something the manufactures spend less in parts,labor and shipping. Therefor prices drop. Happens with pretty much all electronics. As for the older models still costing more then the new models, it's because they cost alot more to make and the stores can't mark it down because they lose money.

[jpthomas27]

I appreciate the help, but things just don't sound right to me...

Originally Posted by Kryptron

It's simple dude. Prices go down. When there is more demand for something the manufactures spend less in parts,labor and shipping. Therefor prices drop. Happens with pretty much all electronics.

Your concept only applies when the item stays constant. Yes the price of a particular model will drop over time as the demand increasaes and the production costs decrease. This is not the same thing, we are talking about 2 seperate models, it would be like saying that a brand new 2009 Chevy truck would be cheaper than the brand new 2008 model. That just doesn't happen. What does happen is the price of the brand new 2008 model drops in order to sell them and get rid of the old inventory.

Originally Posted by Kryptron

As for the older models still costing more then the new models, it's because they cost alot more to make and the stores can't mark it down because they lose money.

Again, I'm not buying this concept. The older models do not cost more than the new one's. You said yourself that the production cost goes down when demand is high. Well, just before the new model comes out the demnand for the old model is at it's highest and the production costs would be at thier lowest. New models are just begining thier production run and that is always the most expensive part of the production lifecycle. Newer technology always costs more than old technology at the time of the new technology's introduction...always.

There is a basic law of supply and demand we are forgetting. When supply stays constant and demand goes down, the price goes down as well. In this case the supply of the old model is constant, because they are not producing them any longer. The demand is going down because people are buying the new model instead...Therfore price goes down. Refer to my example of the Checy truck and you will see a pefect example of this.

It's been a long time since business school for me, but I think I basically got the theories correct.

[Kryptron]

Originally Posted by jpthomas27

I appreciate the help, but things just don't sound right to me...


Your concept only applies when the item stays constant. Yes the price of a particular model will drop over time as the demand increasaes and the production costs decrease. This is not the same thing, we are talking about 2 seperate models, it would be like saying that a brand new 2009 Chevy truck would be cheaper than the brand new 2008 model. That just doesn't happen. What does happen is the price of the brand new 2008 model drops in order to sell them and get rid of the old inventory.


Again, I'm not buying this concept. The older models do not cost more than the new one's. You said yourself that the production cost goes down when demand is high. Well, just before the new model comes out the demnand for the old model is at it's highest and the production costs would be at thier lowest. New models are just begining thier production run and that is always the most expensive part of the production lifecycle. Newer technology always costs more than old technology at the time of the new technology's introduction...always.

There is a basic law of supply and demand we are forgetting. When supply stays constant and demand goes down, the price goes down as well. In this case the supply of the old model is constant, because they are not producing them any longer. The demand is going down because people are buying the new model instead...Therfore price goes down. Refer to my example of the Checy truck and you will see a pefect example of this.

It's been a long time since business school for me, but I think I basically got the theories correct.

First of all, don't compare the automotive industry to consumer electronics because they are nothing alike.
Most products aren't out long enought for the manufacturing cost to go down, alot of companies estimate what they think is going to sell and order months in advance, if it sells more now or later it still cost them the same. Yes electronics are devalued over time but the store selling them can't mark them down for less then what it cost them or else they would lose money. With every advance in technology companies can make better electronics for less, example: a 50" Plasma 5 years ago cost maybe $9000. A new model with better features cost under $5000 Now.

[Kirsty_Mc]

For new technologies the development costs are piled onto the product, which being new usually sells in low numbers. As the technology matures and becomes popular, the development costs are spread thinner, some already having been recouped. Experience gained during the initial manufacturing phase leads to cheaper manufacturing costs. Early products may use say 4 chips to do what a later model does with one... the manufacturer being in a position later to make this tooling investment.

It's the way of the world and applies to most things.

[GORT]

Originally Posted by jpthomas27

I appreciate the help, but things just don't sound right to me...


Your concept only applies when the item stays constant. Yes the price of a particular model will drop over time as the demand increasaes and the production costs decrease. This is not the same thing, we are talking about 2 seperate models, it would be like saying that a brand new 2009 Chevy truck would be cheaper than the brand new 2008 model. That just doesn't happen. What does happen is the price of the brand new 2008 model drops in order to sell them and get rid of the old inventory.


Again, I'm not buying this concept. The older models do not cost more than the new one's. You said yourself that the production cost goes down when demand is high. Well, just before the new model comes out the demnand for the old model is at it's highest and the production costs would be at thier lowest. New models are just begining thier production run and that is always the most expensive part of the production lifecycle. Newer technology always costs more than old technology at the time of the new technology's introduction...always.

There is a basic law of supply and demand we are forgetting. When supply stays constant and demand goes down, the price goes down as well. In this case the supply of the old model is constant, because they are not producing them any longer. The demand is going down because people are buying the new model instead...Therfore price goes down. Refer to my example of the Checy truck and you will see a pefect example of this.

It's been a long time since business school for me, but I think I basically got the theories correct.

Its simple when VHS first came out the players were $1,500. At the end you could get a VHS-DVD combo player for $89.00 same thing for DVD now you can get a DVD player for $39.00. When something is new to the market it starts out at a high price as it becomes popular more companys will get into the market you have competition for your dollars and lower prices.

[ak808]

Yeah I was concerned about this too when I was shopping for a new TV. Reason being yes that technology does become cheaper over time but, what really concerned me was the quality of parts being used. My dad used to own a TV repair shop and he once told me that brand "A" older TVs were better because the newer models were using cheaper parts, hence we would see a lot more of them in the shop. But, then again this is referring to CRTs.

[HDTV1080P]

Originally Posted by jpthomas27

I'm almost ready to purchase a new plasma and am pretty sure I'm going with a Pioneer. What I can't figure out is why the 2008/09 models are cheaper than the 2006/07 models. Shouldn't the older models be cheaper?

Here are the comparisons as far as MSRP is listed. The actual retail prices I've seen seem to follow the same pattern.

Pioneer Kuro
(old) PDP-6010FD = $6,500
(new) PDP-6020FD = $5,500

Pioneer Elite Kuro
(old) Pro-150FD = $7,500
(new) Pro-151FD = $6,500

I've read everything I can find on all 4 TVs and I really don't see much of a difference in any of the technical aspects. I haven't read anything that really indicates the Elite Kuro series has any better picture than the Kuro series either.

Are the older models really better?
Are the Elite Kuro models worth the extra money over the Kuro models?

Any help clearing up the confusion would be most appreciated! Thanks.

The 9th generation 2008 Elite Kuro is suppose to have a little bit better picture quality compared to the 2008 non Elite Kuro. Little bit deeper blacks on the Elite with special menus for calibration.
See this link about what features were removed in order to lower the price a $1000 this year.
https://forum.blu-ray.com/showpost.php?p=886555&postcount=446

[RandDawg]

Originally Posted by jpthomas27

I'm almost ready to purchase a new plasma and am pretty sure I'm going with a Pioneer. What I can't figure out is why the 2008/09 models are cheaper than the 2006/07 models. Shouldn't the older models be cheaper?

Here are the comparisons as far as MSRP is listed. The actual retail prices I've seen seem to follow the same pattern.

Pioneer Kuro
(old) PDP-6010FD = $6,500
(new) PDP-6020FD = $5,500

Pioneer Elite Kuro
(old) Pro-150FD = $7,500
(new) Pro-151FD = $6,500

I've read everything I can find on all 4 TVs and I really don't see much of a difference in any of the technical aspects. I haven't read anything that really indicates the Elite Kuro series has any better picture than the Kuro series either.

Are the older models really better?
Are the Elite Kuro models worth the extra money over the Kuro models?

Any help clearing up the confusion would be most appreciated! Thanks.

I only read the first response to this and decided to stop reading as it was just painful. Hopefully this will help more.

First of all when demand goes up, independent of other factors, then price goes up. If anybody disagrees, they don't understand how a supply/demand curve really works.

Now, even if the price of of manufacturing the units goes down for pioneer, the retail price will not drop unless pioneer was forced to sell the previous models at a slim or non-existant margin and therefore the pricing point of the good could not be at the optimum revenue point without incurring a loss on each sale.

Therefore Pioneer is either re-evaluating its pricing strategies or they are attempting to increase the competition with the LCD market.

Saying that increased consumer demand will lower prices is just plain stupid.

[richteer]

Originally Posted by RandDawg

Saying that increased consumer demand will lower prices is just plain stupid.

Agreed, but I think that perhaps the OP was referring to economies of scale (which can then be passed on to the consumer). It's the old chicken and egg problem. Which comes first: lower prices due to economies of scale, or economies of scale becuase of increased sales? A bit of both I suspect, and we all gain because of the vicious circle which ensues. :-)